Inside Google

The U.S. Department of Justice has come out against the proposed
agreement to settle copyright lawsuits that authors and major
publishers filed against Google over the search company’s book search
program.

"This Court should reject the Proposed Settlement in its current
form and encourage the parties to continue negotiations," reads a
filing the DOJ submitted to the U.S. District Court for the Southern
District of New York late on Friday.

The proposed settlement must be modified by Google and the
plaintiffs so that it complies with U.S. copyright and antitrust laws,
the DOJ said in its filing, a 32-page Statement of Interest.

The DOJ’s opinion is likely to be seen a major blow against Google,
which has been in court over this matter for about four years and is
eager to get the case settled.

The DOJ had until Friday to submit a written report to the court on
the findings of a formal investigation over whether the proposed
agreement violated U.S. laws.

Rumors that the DOJ had started reviewing the proposed agreement
surfaced in April. The DOJ confirmed that it was conducting a formal
investigation in July.

Those following the case have been widely anticipating the result of
the DOJ’s probe of the proposed agreement, which has been loudly
praised and criticized since it was announced in October of last year.

Book authors and the Authors Guild filed a class action lawsuit,
while five large publishers filed a separate lawsuit as representatives
of the Association of American Publishers’ membership.

The lawsuits were brought after Google launched a program to scan
and index sometimes entire collections from the libraries of major
universities without always getting permission from the copyright
owners of the books.

Google made the text of the books searchable on its book search
engine, claiming it’s protected by the fair use principle because it
only showed snippets of text for in-copyright books it had scanned
without permission.

However, after two years of negotiations, Google and the plaintiffs reached middle ground, hammering out a wide-ranging settlement agreement
that calls for Google to pay US$125 million and in exchange gives the
search company rights to display meatier chunks of these in-copyright
books, not just snippets.

In addition, Google would make it possible for people to buy online
access to these books. The agreement would also allow institutions to
buy subscriptions to books and make them available to their
constituents.

A royalty system would also be set up to compensate authors and
publishers for access to their works via the creation of the Book
Rights Registry. This would be an independent, nonprofit entity
entrusted with distributing payments to copyright holders earned
through online access to their works. Revenue will come from
institutional subscriptions, book sales and ad-revenue sharing.

The Registry, whose board of directors would be made up of an equal
number of author and publisher representatives, would also locate and
register copyright owners, who in turn have the option to request to be
included in or excluded from the project.

A big portion of Google’s $125 million payment would go towards
funding the Registry, while the rest would be used to settle existing
claims by authors and publishers and to cover legal fees.

Google, the Authors Guild and the AAP maintain that the proposed
settlement will be beneficial to authors, publishers and readers by
making it easier to find, distribute and purchase books, especially
those that are out of print.

However, critics have raised several objections, including what they
perceive as excessive control by Google over prices and over so-called
"orphan works." The latter are books that are under copyright but whose
owners can’t be found because the author has died or the publishing
house disappeared.

The court where the case is being heard allowed hundreds of backers
and critics of the proposed agreement to submit opinions for several
months. That comment period closed earlier this month.

Consumer Watchdog, a
consumer protection organization that earlier this year urged the DOJ
to get involved, filed a 30-page document opposing the agreement,
saying it will "strip rights from millions of absent class members,
worldwide, in violation of national and international copyright law,
for the sole benefit of Google."

There should be a competitive book-search market, while the U.S.
Congress must solve the orphan works problem, according to the group.
"The parties simply cannot justify this ‘solution’ which does not
adequately protect the Rightsholders and unfairly benefits a single
party," reads the Consumer Watchdog statement.

Meanwhile, the Center for Democracy and Technology (CDT) came out in
favor of the deal, saying the new book search services will be
"extraordinarily valuable, and will make available to the public a vast
amount of knowledge and information that is largely inaccessible
today." The CDT tempered its endorsement by stating that the new
services create "serious privacy concerns" and that the court should
take "affirmative action" during the settlement process to make sure
reader privacy is protected.

On Oct. 7, Judge Denny Chin will preside over a hearing where Google
and the plaintiffs will have a chance to offer oral arguments in favor
of approving the agreement. Those opposed will also have a chance to
voice their opinions.